##### Table of Contents



UNITED STATES

SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549


FORM 10-Q

[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934

For the quarterly period ended September 30, 2003

or

[  ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934

For the
transition period from

to

Commission file number 333-43157

NORTHLAND CABLE TELEVISION,
INC.

(Exact name of registrant as specified in its charter)


|                                               |  |                                     
|---------------------------------------------- |  | ------------------------------------
|STATE OF WASHINGTON                            |  | 91-1311836                          
|                                               |  |                                     
|(State or other jurisdiction of incorporation) |  | (I.R.S. Employer Identification No.)

AND SUBSIDIARY GUARANTOR:

NORTHLAND CABLE NEWS, INC.

(Exact name of registrant as specified in its charter)


|                                                  |  |                                     
|------------------------------------------------- |  | ------------------------------------
|STATE OF WASHINGTON                               |  | 91-1638891                          
|                                                  |  |                                     
|(State or other jurisdiction of
incorporation)    |  | (I.R.S. Employer Identification No.)
|                                                  |  |                                     
|101 STEWART STREET, SUITE 700
SEATTLE, WASHINGTON |  | 98101                               
|                                                  |  |                                     
|(Address of principal executive offices)          |  | (Zip Code)                          

Registrants telephone number, including area code: (206) 621-1351

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days.

Yes [X]    No [  ]

Indicate by checkmark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act.)

Yes [  ]     No [X]





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TABLE OF CONTENTS



|                               |                                                                                               |  |  |  |  |  |  | 
|------------------------------ | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART 1  FINANCIAL INFORMATION
|                               | ITEM 1. Financial Statements                                                                 
|                               | ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                               | ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                           
|                               | ITEM 4. CONTROLS AND PROCEDURES                                                              
|PART II  OTHER INFORMATION   
|                               | ITEM 1 Legal proceedings                                                                     
|                               | ITEM 2 Changes in securities                                                                 
|                               | ITEM 3 Defaults upon senior securities                                                       
|                               | ITEM 4 Submission of matters to a vote of security holders                                   
|                               | ITEM 5 Other information                                                                     
|                               | ITEM 6 Exhibits and Reports on Form 8-K                                                      
|SIGNATURES                    
|EXHIBIT 31.(A)                
|EXHIBIT 31.(B)                
|EXHIBIT 32.(A)                
|EXHIBIT 32.2                  



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##### Table of Contents






PART 1 - FINANCIAL INFORMATION




ITEM 1. Financial Statements

NORTHLAND CABLE TELEVISION, INC. AND SUBSIDIARY
(A wholly owned subsidiary of Northland Telecommunications Corporation)
CONDENSED CONSOLIDATED BALANCE SHEETS - (UNAUDITED)

|                                                                                                     |                                                                                                                                         |                                                 |             |               |             |              |             |             |             |  
|---------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------- | ----------- | ------------- | ----------- | ------------ | ----------- | ----------- | ----------- | -
|                                                                                                     |                                                                                                                                         |                                                 |             | September 30, |             | December 31,
|                                                                                                     |                                                                                                                                         |                                                 |             | 2003          |             | 2002        
|                                                                                                     |                                                                                                                                         |                                                 |             |               |             |             
|ASSETS                                                                                               |                                                                                                                                         |                                                 |             |               |             |              |             |            
|Current Assets:                                                                                      |                                                                                                                                         |                                                 |             |               |             |              |             |            
|                                                                                                     | Cash and cash equivalents                                                                                                               |                                                 | $           | 4,290,861     |             |              | $           | 1,538,002   |            
|                                                                                                     | Due from Parent and affiliates                                                                                                          |                                                 |             | 733,820       |             |              |             | 796,464     |            
|                                                                                                     | System sale receivable                                                                                                                  |                                                 |             | 4,156,191     |             |              |             |            |            
|                                                                                                     | Accounts receivable                                                                                                                     |                                                 |             | 1,709,115     |             |              |             | 2,047,900   |            
|                                                                                                     | Prepaid expenses                                                                                                                        |                                                 |             | 659,062       |             |              |             | 392,271     |            
|                                                                                                     |                                                                                                                                         |                                                 |             |               |             |              |             |            
|                                                                                                     |                                                                                                                                         | Total current assets                            |             |               | 11,549,049  |              |             |             | 4,774,637   |  
|Investment in Cable Television Properties:                                                           |                                                                                                                                         |                                                 |             |               |             |              |             |            
|Property and equipment, net of accumulated
depreciation of $58,280,163 and $52,255,286,
respectively |                                                                                                                                         |                                                 | 42,239,321  |               |             |              | 44,152,208  |            
|Franchise agreements, net of accumulated amortization
of $38,923,291                                 |                                                                                                                                         |                                                 | 39,493,670  |               |             |              | 39,487,137  |            
|Goodwill, net of accumulated amortization
of $2,407,104                                              |                                                                                                                                         |                                                 | 3,937,329   |               |             |              | 3,937,329   |            
|                                                                                                     |                                                                                                                                         |                                                 |             |               |             |              |             |            
|                                                                                                     |                                                                                                                                         | Total investment in cable television properties |             |               | 85,670,320  |              |             |             | 87,576,674  |  
|Loan fees, net of accumulated amortization of $2,419,043
and $2,650,564, respectively                |                                                                                                                                         |                                                 | 1,799,543   |               |             |              | 3,188,581   |            
|Other intangible assets, net of accumulated
amortization of $3,192,816 and $3,140,381, respectively  |                                                                                                                                         |                                                 | 84,174      |               |             |              | 136,608     |            
|Assets of discontinued operations                                                                    |                                                                                                                                         |                                                 |            |               |             |              | 25,504,853  |            
|                                                                                                     |                                                                                                                                         |                                                 |             |               |             |              |             |            
|                                                                                                     |                                                                                                                                         | Total assets                                    |             | $             | 99,103,086  |              |             | $           | 121,181,353 |  
|                                                                                                     |                                                                                                                                         |                                                 |             |               |             |              |             |            
|LIABILITIES AND SHAREHOLDERS DEFICIT                                                                |                                                                                                                                         |                                                 |             |               |             |              |             |            
|Current Liabilities:                                                                                 |                                                                                                                                         |                                                 |             |               |             |              |             |            
|                                                                                                     | Accounts payable                                                                                                                        |                                                 | $           | 63,737        |             |              | $           | 528,645     |            
|                                                                                                     | Accrued expenses                                                                                                                        |                                                 |             | 7,619,816     |             |              |             | 4,705,722   |            
|                                                                                                     | Converter deposits                                                                                                                      |                                                 |             | 123,516       |             |              |             | 116,027     |            
|                                                                                                     | Subscriber prepayments                                                                                                                  |                                                 |             | 1,370,794     |             |              |             | 1,629,235   |            
|                                                                                                     | Due to affiliates                                                                                                                       |                                                 |             | 73,813        |             |              |             | 228,220     |            
|                                                                                                     | Current portion of notes payable                                                                                                        |                                                 |             | 2,100,000     |             |              |             | 2,775,920   |            
|                                                                                                     | Interest rate swap agreements                                                                                                           |                                                 |             |              |             |              |             | 120,377     |            
|                                                                                                     | Liabilities of discontinued operations                                                                                                  |                                                 |             |              |             |              |             | 1,443,610   |            
|                                                                                                     |                                                                                                                                         |                                                 |             |               |             |              |             |            
|                                                                                                     |                                                                                                                                         | Total current liabilities                       |             |               | 11,351,676  |              |             |             | 11,547,756  |  
|Notes payable, net of current portion                                                                |                                                                                                                                         |                                                 | 113,251,534 |               |             |              | 165,255,262 |            
|Deferred tax liabilities                                                                             |                                                                                                                                         |                                                 | 173,355     |               |             |              |            |            
|                                                                                                     |                                                                                                                                         |                                                 |             |               |             |              |             |            
|                                                                                                     |                                                                                                                                         | Total liabilities                               |             |               | 124,776,565 |              |             |             | 176,803,018 |  
|                                                                                                     |                                                                                                                                         |                                                 |             |               |             |              |             |            
|Shareholders Deficit:                                                                               |                                                                                                                                         |                                                 |             |               |             |              |             |            
|                                                                                                     | Common stock (par value $1.00 per share, authorized
50,000 shares; 10,000 shares issued and outstanding)
and additional paid-in capital |                                                 |             | 12,359,377    |             |              |             | 12,359,377  |            
|                                                                                                     | Accumulated deficit                                                                                                                     |                                                 |             | (38,032,856   | )           |              |             | (67,981,042 | )          
|                                                                                                     |                                                                                                                                         |                                                 |             |               |             |              |             |            
|                                                                                                     |                                                                                                                                         | Total shareholders deficit                     |             |               | (25,673,479 | )            |             |             | (55,621,665 | )
|                                                                                                     |                                                                                                                                         |                                                 |             |               |             |              |             |            
|Total liabilities and shareholders deficit                                                          |                                                                                                                                         | $                                               | 99,103,086  |               |             | $            | 121,181,353 |            
|                                                                                                     |                                                                                                                                         |                                                 |             |               |             |              |             |            

The accompanying notes are an integral part of these condensed consolidated financial statements.





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##### Table of Contents



NORTHLAND CABLE TELEVISION, INC. AND SUBSIDIARY
(A wholly owned subsidiary of Northland Telecommunications Corporation)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME - (UNAUDITED)

|                                                                   |                                                                                                                                                                         |                          |            |                                         |            |      |            |            |            |  
|------------------------------------------------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------ | ---------- | --------------------------------------- | ---------- | ---- | ---------- | ---------- | ---------- | -
|                                                                   |                                                                                                                                                                         |                          |            | For the nine months ended September 30,
|                                                                   |                                                                                                                                                                         |                          |            | 2003                                    |            | 2002
|                                                                   |                                                                                                                                                                         |                          |            |                                         |            |     
|Service revenues                                                   |                                                                                                                                                                         | $                        | 37,242,399 |                                         |            | $    | 36,661,583 |           
|Expenses:                                                          |                                                                                                                                                                         |                          |            |                                         |            |      |            |           
|                                                                   | Cable system operations (including
$98,560 and $187,369, net paid to affiliates
in 2003 and 2002, respectively), exclusive of
depreciation and amortization shown below |                          |            | 14,332,665                              |            |      |            | 13,956,781 |           
|                                                                   | General and administrative (including
$1,325,224, net paid to affiliates in 2003,
and $59,234, net received from affiliates 2002)                                       |                          |            | 6,891,779                               |            |      |            | 5,271,495  |           
|                                                                   | Management fees paid to Parent                                                                                                                                          |                          |            | 1,862,452                               |            |      |            | 1,833,078  |           
|                                                                   | Depreciation and amortization                                                                                                                                           |                          |            | 6,643,558                               |            |      |            | 6,557,855  |           
|                                                                   |                                                                                                                                                                         |                          |            |                                         |            |      |            |           
|                                                                   |                                                                                                                                                                         | Total operating expenses |            |                                         | 29,730,454 |      |            |            | 27,619,209 |  
|                                                                   |                                                                                                                                                                         |                          |            |                                         |            |      |            |           
|Income from operations                                             |                                                                                                                                                                         |                          | 7,511,945  |                                         |            |      | 9,042,374  |           
|Other income (expense):                                            |                                                                                                                                                                         |                          |            |                                         |            |      |            |           
|                                                                   | Interest expense, net                                                                                                                                                   |                          |            | (8,396,406                              | )          |      |            | (7,140,067 | )         
|                                                                   | Interest income and other, net                                                                                                                                          |                          |            | 23,528                                  |            |      |            | 46,119     |           
|                                                                   | Loss on disposal of assets                                                                                                                                              |                          |            | (50,079                                 | )          |      |            | (259,297   | )         
|                                                                   |                                                                                                                                                                         |                          |            |                                         |            |      |            |           
|                                                                   |                                                                                                                                                                         |                          | (8,422,957 | )                                       |            |      | (7,353,245 | )         
|                                                                   |                                                                                                                                                                         |                          |            |                                         |            |      |            |           
|(Loss) income from continuing operations before income
tax expense |                                                                                                                                                                         |                          | (911,012   | )                                       |            |      | 1,689,129  |           
|                                                                   |                                                                                                                                                                         |                          |            |                                         |            |      |            |           
|                                                                   | Income tax expense                                                                                                                                                      |                          |            | (183,165                                | )          |      |            | (8,142     | )         
|(Loss) income from continuing operations                           |                                                                                                                                                                         |                          | (1,094,177 | )                                       |            |      | 1,680,987  |           
|Discontinued operations (note 4)                                   |                                                                                                                                                                         |                          |            |                                         |            |      |            |           
|                                                                   | Income (loss) from operations of Aiken and Port
Angeles Systems, net of tax (including gain on
sales of systems of $31,525,585 in 2003)                                 |                          |            | 31,042,363                              |            |      |            | (613,219   | )         
|                                                                   |                                                                                                                                                                         |                          |            |                                         |            |      |            |           
|Net income                                                         |                                                                                                                                                                         |                          | 29,948,186 |                                         |            |      | 1,067,768  |           
|                                                                   |                                                                                                                                                                         |                          |            |                                         |            |      |            |           
|Other comprehensive loss:                                          |                                                                                                                                                                         |                          |            |                                         |            |      |            |           
|                                                                   | Reclassification of accumulated other comprehensive
income to unrealized gain on interest rate swaps                                                                    |                          |            |                                        |            |      |            | (268,000   | )         
|                                                                   |                                                                                                                                                                         |                          |            |                                         |            |      |            |           
|                                                                   |                                                                                                                                                                         | Other comprehensive loss |            |                                         |           |      |            |            | (268,000   | )
|                                                                   |                                                                                                                                                                         |                          |            |                                         |            |      |            |           
|Total comprehensive income                                         |                                                                                                                                                                         | $                        | 29,948,186 |                                         |            | $    | 799,768    |           
|                                                                   |                                                                                                                                                                         |                          |            |                                         |            |      |            |           

The accompanying notes are an integral part of these condensed consolidated financial statements.





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##### Table of Contents



NORTHLAND CABLE TELEVISION, INC. AND SUBSIDIARY
(A wholly owned subsidiary of Northland Telecommunications Corporation)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME - (UNAUDITED)

|                                                                   |                                                                                                                                                                        |                          |            |                                          |            |      |            |            |           |  
|------------------------------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------ | ---------- | ---------------------------------------- | ---------- | ---- | ---------- | ---------- | --------- | -
|                                                                   |                                                                                                                                                                        |                          |            | For the three months ended September 30,
|                                                                   |                                                                                                                                                                        |                          |            | 2003                                     |            | 2002
|                                                                   |                                                                                                                                                                        |                          |            |                                          |            |     
|Service revenues                                                   |                                                                                                                                                                        | $                        | 12,376,798 |                                          |            | $    | 12,183,899 |           
|Expenses:                                                          |                                                                                                                                                                        |                          |            |                                          |            |      |            |           
|                                                                   | Cable system operations (including
$46,505 and $67,236, net paid to affiliates
in 2003 and 2002, respectively), exclusive of
depreciation and amortization shown below |                          |            | 4,741,599                                |            |      |            | 4,720,248  |          
|                                                                   | General and administrative (including
$599,698 and $80,891 net paid to affiliates in
2003 and 2002, respectively)                                                      |                          |            | 2,507,646                                |            |      |            | 1,703,561  |          
|                                                                   | Management fees paid to Parent                                                                                                                                         |                          |            | 618,840                                  |            |      |            | 609,195    |          
|                                                                   | Depreciation and amortization                                                                                                                                          |                          |            | 2,245,419                                |            |      |            | 2,198,281  |          
|                                                                   |                                                                                                                                                                        |                          |            |                                          |            |      |            |           
|                                                                   |                                                                                                                                                                        | Total operating expenses |            |                                          | 10,113,504 |      |            |            | 9,231,285 |  
|                                                                   |                                                                                                                                                                        |                          |            |                                          |            |      |            |           
|Income from operations                                             |                                                                                                                                                                        |                          | 2,263,294  |                                          |            |      | 2,952,614  |           
|Other income (expense):                                            |                                                                                                                                                                        |                          |            |                                          |            |      |            |           
|                                                                   | Interest expense, net                                                                                                                                                  |                          |            | (2,860,527                               | )          |      |            | (2,368,047 | )        
|                                                                   | Interest income and other, net                                                                                                                                         |                          |            | 8,406                                    |            |      |            | 16,995     |          
|                                                                   | Loss on disposal of assets                                                                                                                                             |                          |            | (27,452                                  | )          |      |            | (243,421   | )        
|                                                                   |                                                                                                                                                                        |                          |            |                                          |            |      |            |           
|                                                                   |                                                                                                                                                                        |                          | (2,879,573 | )                                        |            |      | (2,594,473 | )         
|                                                                   |                                                                                                                                                                        |                          |            |                                          |            |      |            |           
|(Loss) income from continuing operations before income
tax expense |                                                                                                                                                                        |                          | (616,279   | )                                        |            |      | 358,141    |           
|                                                                   |                                                                                                                                                                        |                          |            |                                          |            |      |            |           
|                                                                   | Income tax expense                                                                                                                                                     |                          |            | (25,391                                  | )          |      |            | (3,262     | )        
|(Loss) income from continuing operations                           |                                                                                                                                                                        |                          | (641,670   | )                                        |            |      | 354,879    |           
|Discontinued operations (note 4)                                   |                                                                                                                                                                        |                          |            |                                          |            |      |            |           
|                                                                   | Loss from operations of Aiken and Port
Angeles Systems, net of tax                                                                                                     |                          |            |                                         |            |      |            | (45,960    | )        
|                                                                   |                                                                                                                                                                        |                          |            |                                          |            |      |            |           
|Net (loss) income                                                  |                                                                                                                                                                        |                          | (641,670   | )                                        |            |      | 308,919    |           
|                                                                   |                                                                                                                                                                        |                          |            |                                          |            |      |            |           
|Other comprehensive loss:                                          |                                                                                                                                                                        |                          |            |                                          |            |      |            |           
|                                                                   | Reclassification of accumulated other comprehensive
income to unrealized gain on interest rate swaps                                                                   |                          |            |                                         |            |      |            | (59,000    | )        
|                                                                   |                                                                                                                                                                        |                          |            |                                          |            |      |            |           
|                                                                   |                                                                                                                                                                        | Other comprehensive loss |            |                                          |           |      |            |            | (59,000   | )
|                                                                   |                                                                                                                                                                        |                          |            |                                          |            |      |            |           
|Total comprehensive (loss) income                                  |                                                                                                                                                                        | $                        | (641,670   | )                                        |            | $    | 249,919    |           
|                                                                   |                                                                                                                                                                        |                          |            |                                          |            |      |            |           

The accompanying notes are an integral part of these condensed consolidated financial statements.





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##### Table of Contents



NORTHLAND CABLE TELEVISION, INC. AND SUBSIDIARY
(A wholly owned subsidiary of Northland Telecommunications Corporation)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - (UNAUDITED)

|                                                                              |                                                    |                                       |             |                                         |          |      |            |            |           |  
|----------------------------------------------------------------------------- | -------------------------------------------------- | ------------------------------------- | ----------- | --------------------------------------- | -------- | ---- | ---------- | ---------- | --------- | -
|                                                                              |                                                    |                                       |             | For the nine months ended September 30,
|                                                                              |                                                    |                                       |             | 2003                                    |          | 2002
|                                                                              |                                                    |                                       |             |                                         |          |     
|CASH FLOWS FROM OPERATING ACTIVITIES:                                         |                                                    |                                       |             |                                         |          |      |            |           
|Net income                                                                    |                                                    | $                                     | 29,948,186  |                                         |          | $    | 1,067,768  |           
|Adjustments to reconcile net income to
cash provided by operating activities: |                                                    |                                       |             |                                         |          |      |            |           
|                                                                              | Depreciation and amortization                      |                                       |             | 7,061,356                               |          |      |            | 7,973,371  |          
|                                                                              | Unrealized gain on interest rate swap agreements   |                                       |             | (120,377                                | )        |      |            | (1,981,411 | )        
|                                                                              | Amortization of loan costs                         |                                       |             | 393,273                                 |          |      |            | 503,987    |          
|                                                                              | (Gain) loss on disposal of assets                  |                                       |             | (31,475,506                             | )        |      |            | 259,297    |          
|                                                                              | Deferred income taxes                              |                                       |             | 173,355                                 |          |      |            |           |          
|                                                                              | (Increase) decrease in operating assets:           |                                       |             |                                         |          |      |            |            |          
|                                                                              |                                                    | Accounts receivable                   |             |                                         | 326,869  |      |            |            | (127,658  | )
|                                                                              |                                                    | Prepaid expenses                      |             |                                         | (267,792 | )    |            |            | (143,817  | )
|                                                                              |                                                    | Due from Parent and affiliates        |             |                                         | 61,822   |      |            |            | (700,147  | )
|                                                                              | Increase (decrease) in operating liabilities       |                                       |             |                                         |          |      |            |            |          
|                                                                              |                                                    | Accounts payable and accrued expenses |             |                                         | 917,971  |      |            |            | 1,428,210 |  
|                                                                              |                                                    | Due to affiliates                     |             |                                         | (156,529 | )    |            |            | (80,313   | )
|                                                                              |                                                    | Converter deposits                    |             |                                         | 7,489    |      |            |            | (30,303   | )
|                                                                              |                                                    | Subscriber prepayments                |             |                                         | (258,441 | )    |            |            | (152,642  | )
|                                                                              |                                                    |                                       |             |                                         |          |      |            |           
|Net cash provided by operating activities                                     |                                                    |                                       | 6,611,676   |                                         |          |      | 8,016,342  |           
|                                                                              |                                                    |                                       |             |                                         |          |      |            |           
|CASH FLOWS FROM INVESTING ACTIVITIES:                                         |                                                    |                                       |             |                                         |          |      |            |           
|Investment in cable television properties                                     |                                                    |                                       | (4,691,180  | )                                       |          |      | (5,753,630 | )         
|Proceeds from sale of cable system, net                                       |                                                    |                                       | 53,376,107  |                                         |          |      | 999,562    |           
|Proceeds from disposal of assets                                              |                                                    |                                       | 14,342      |                                         |          |      | 5,588      |           
|Franchises and other intangibles                                              |                                                    |                                       | (6,533      | )                                       |          |      | (14,718    | )         
|                                                                              |                                                    |                                       |             |                                         |          |      |            |           
|Net cash provided by (used in) investing activities                           |                                                    |                                       | 48,692,736  |                                         |          |      | (4,763,198 | )         
|                                                                              |                                                    |                                       |             |                                         |          |      |            |           
|CASH FLOWS FROM FINANCING ACTIVITIES:                                         |                                                    |                                       |             |                                         |          |      |            |           
|Principal payments on borrowings                                              |                                                    |                                       | (52,679,648 | )                                       |          |      | (2,000,000 | )         
|                                                                              |                                                    |                                       |             |                                         |          |      |            |           
|Net cash used in financing activities                                         |                                                    |                                       | (52,679,648 | )                                       |          |      | (2,000,000 | )         
|                                                                              |                                                    |                                       |             |                                         |          |      |            |           
|INCREASE IN CASH                                                              |                                                    |                                       | 2,624,764   |                                         |          |      | 1,253,144  |           
|CASH, beginning of period                                                     |                                                    |                                       | 1,666,097   |                                         |          |      | 2,724,099  |           
|                                                                              |                                                    |                                       |             |                                         |          |      |            |           
|CASH, end of period                                                           |                                                    | $                                     | 4,290,861   |                                         |          | $    | 3,977,243  |           
|                                                                              |                                                    |                                       |             |                                         |          |      |            |           
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:                             |                                                    |                                       |             |                                         |          |      |            |           
|                                                                              | Cash paid during the period for interest           |                                       | $           | 6,458,094                               |          |      | $          | 9,700,616  |          
|                                                                              |                                                    |                                       |             |                                         |          |      |            |           
|                                                                              | Cash paid during the period for state income taxes |                                       | $           | 9,810                                   |          |      | $          | 9,363      |          
|                                                                              |                                                    |                                       |             |                                         |          |      |            |           

The accompanying notes are an integral part of these condensed consolidated financial statements.





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NORTHLAND CABLE TELEVISION, INC. AND SUBSIDIARY
(A wholly owned subsidiary of Northland Telecommunications Corporation)

NOTES TO UNAUDITED FINANCIAL STATEMENTS
September 30, 2003
(Unaudited)

(1)  Basis of Presentation

Interim Financial Reporting

These unaudited condensed consolidated financial statements are being
filed in conformity with Rule 10-01 of Regulation S-X regarding interim
financial statement disclosures and do not contain all of the necessary
footnote disclosures required for a fair presentation of the consolidated
balance sheets, statements of operations and comprehensive income and
statements of cash flows in conformity with accounting principles
generally accepted in the United States of America. However, in the
opinion of management, this data includes all adjustments, consisting only
of normal recurring accruals, necessary to present fairly the Companys
consolidated financial position at September 30, 2003, its consolidated
statements of operations and comprehensive income for the nine and three
months ended September 30, 2003 and 2002 and its consolidated statements
of cash flows for the nine months ended September 30, 2003 and 2002.
Results of operations for these periods are not necessarily indicative of
results to be expected for the full year. These financial statements and
notes should be read in conjunction with the Companys Annual Report on
Form 10-K for the year ended December 31, 2002.

On March 11, 2003 and March 31, 2003, the Company sold the operating
assets and franchise rights of its cable systems in and around Port
Angeles, Washington and Aiken, South Carolina, respectively. The
accompanying financial statements have been restated to report the
discontinued operations of the Company, effected for this sale.

Effective January 1, 2003, the Company adopted SFAS No. 143, Accounting
for Asset Retirement Obligations, (SFAS No. 143) which addresses
financial accounting and reporting for obligations associated with the
retirement of tangible long lived assets and associated asset retirement
obligations (ARO). Under the scope of this pronouncement, the Company
has ARO associated with the removal of equipment from poles and headend
sites that are leased from third parties. Based on managements analyses,
the Company has concluded that for the reasons mentioned below, it is not
able to reasonably estimate the fair values of the ARO. First to operate
the cable television network, the Company will always need to have
equipment deployed at these poles and headend sites. Additionally, the
Company has not historically incurred any ARO and, given the length of
time in the future when any potential obligations might exist, management
believes that estimating any probability at this time is not practicable.
As a result, upon adoption of SFAS No. 143 the Company did not record any
ARO associated with the obligation to remove the equipment.

Certain prior period amounts have been reclassified to conform to the
current period presentation. This includes reclassification of unrealized
gains and losses on interest rate swap agreements, which were previously
classified as a separate financial statement caption within other income
(expense), to the interest expense financial statement caption.

(2)  Intangible Assets

In accordance with the provisions of SFAS No. 142, Goodwill and Other
Intangible Assets, the Company does not amortize goodwill or any other
intangible assets determined to have indefinite lives. The Company has
determined that its franchises meet the definition of indefinite lived
assets. The Company tests these assets for impairment on an annual basis
during the fourth quarter, or on an interim basis if an event occurs or
circumstances change that would reduce the fair value of a reporting unit
below its carrying value. The book value of the Companys intangible
assets, effecting for the sale of the Aiken System and the Port Angeles
System described in note 4, is presented in the following table:





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##### Table of Contents



|                                    |                         |   |                    |            |                   |   |             |             |          |   |              |            |          |   |            |            |     |   |             |             |   |   |            |            | 
|----------------------------------- | ----------------------- | - | ------------------ | ---------- | ----------------- | - | ----------- | ----------- | -------- | - | ------------ | ---------- | -------- | - | ---------- | ---------- | --- | - | ----------- | ----------- | - | - | ---------- | ---------- | 
|                                    |                         |   | September 30, 2003 |            | December 31, 2002
|                                    |                         |   |                    |            |                  
|                                    |                         |   | Gross              |            |                   |   |             |             | Net      |   | Gross        |            |          |   |            |            | Net
|                                    |                         |   | Carrying           |            | Accumulated       |   | Carrying    |             | Carrying |   | Accumulated  |            | Carrying
|                                    |                         |   | Amount             |            | Amortization      |   | Amount      |             | Amount   |   | Amortization |            | Amount  
|                                    |                         |   |                    |            |                   |   |             |             |          |   |              |            |         
|Indefinite-lived
intangible assets: |                         |   |                    |            |                   |   |             |             |          |   |              |            |          |   |            |            |     |   |             |             |   |   |            |           
|                                    | Franchises              |   | $                  | 78,416,961 |                   |   | $           | (38,923,291 | )        |   | $            | 39,493,670 |          |   | $          | 78,410,428 |     |   | $           | (38,923,291 | ) |   | $          | 39,487,137 | 
|                                    | Goodwill                |   |                    | 6,344,433  |                   |   |             | (2,407,104  | )        |   |              | 3,937,329  |          |   |            | 6,344,433  |     |   |             | (2,407,104  | ) |   |            | 3,937,329  | 
|                                    |                         |   |                    |            |                   |   |             |             |          |   |              |            |          |   |            |            |     |   |             |             |   |   |            |           
|                                    |                         |   | 84,761,394         |            |                   |   | (41,330,395 | )           |          |   | 43,430,999   |            |          |   | 84,754,861 |            |     |   | (41,330,395 | )           |   |   | 43,424,466 |           
|Definite-lived
intangible assets:   |                         |   |                    |            |                   |   |             |             |          |   |              |            |          |   |            |            |     |   |             |             |   |   |            |           
|                                    | Loan fees               |   |                    | 4,218,586  |                   |   |             | (2,419,043  | )        |   |              | 1,799,543  |          |   |            | 5,839,145  |     |   |             | (2,650,564  | ) |   |            | 3,188,581  | 
|                                    | Other intangible assets |   |                    | 3,276,990  |                   |   |             | (3,192,816  | )        |   |              | 84,174     |          |   |            | 3,276,989  |     |   |             | (3,140,381  | ) |   |            | 136,608    | 
|                                    |                         |   |                    |            |                   |   |             |             |          |   |              |            |          |   |            |            |     |   |             |             |   |   |            |           
|                                    |                         | $ | 92,256,970         |            |                   | $ | (46,942,254 | )           |          | $ | 45,314,716   |            |          | $ | 93,870,995 |            |     | $ | (47,121,340 | )           |   | $ | 46,749,655 |           
|                                    |                         |   |                    |            |                   |   |             |             |          |   |              |            |          |   |            |            |     |   |             |             |   |   |            |           

Amortization of loan fees and other intangibles for each of the next five
years is expected to be approximately as follows:

|     |  |   |           | 
|---- |  | - | --------- | 
|2003 |  | $ | 124,000   | 
|2004 |  |   | 468,000   | 
|2005 |  |   | 468,000   | 
|2006 |  |   | 462,000   | 
|2007 |  |   | 362,000   | 
|     |  |   |           | 
|     |  | $ | 1,884,000 | 
|     |  |   |           | 

(3)  Amended and Restated Senior Credit Facility

On November 13, 2003, the Company amended and restated its existing
senior credit facility (the Amended and Restated Senior Credit
Facility). The Amended and Restated Senior Credit Facility establishes a
term loan in the amount of $15,000,000 and a $2,000,000 revolving credit
loan, under which the Company borrowed $1,000,000 upon amendment and
restatement. The proceeds from the Amended and Restated Senior Credit
Facility were used to repay the Companys existing senior credit
facility, with a balance of $15,351,534 at September 30, 2003, to provide
working capital and for other general purposes. The Amended and Restated
Senior Credit Facility matures on December 31, 2006 and requires the
Company to make quarterly principal payments beginning March 31, 2004.
The current portion of notes payable included in the accompanying balance
sheet as of September 30, 2003 reflects the principal payment
requirements of the Amended and Restated Senior Credit Facility. Annual
maturities of the Amended and Restated Senior Credit Facility are as
follows:

|      |      |   |            |           | 
|----- | ---- | - | ---------- | --------- | 
|      |      |   | Principal 
|      |      |   | Payments  
|      |      |   |           
|      | 2004 |   | $          | 2,800,000 | 
|      | 2005 |   |            | 3,400,000 | 
|      | 2006 |   |            | 9,800,000 | 
|      |      |   |            |          
|Total |      | $ | 16,000,000 |          
|      |      |   |            |          

The interest rate per annum applicable to the Amended and Restated Senior
Credit Facility is a fluctuating rate of interest measured by reference
to either: (i) the Index Rate, as defined, plus a borrowing margin of
2.50%; or (ii) the London interbank offered rate (LIBOR), plus a
borrowing margin of 3.75%.





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##### Table of Contents



The Amended and Restated Senior Credit Facility contains a number of
covenants, which among other things, require the Company to comply with
specified financial ratios, including maintenance, as tested on a
quarterly basis, of: (A) a Maximum Total Leverage Ratio (the ratio of
Total Debt to Annualized Operating Cash Flow (as defined)) of not more
than 6.50 to 1.00; (B) a Maximum Senior Leverage Ratio (the ratio of
Senior Debt to Annualized Operating Cash Flow (as defined)) of not more
than 1.00 to 1.00 (C) an Interest Coverage Ratio (the ratio of Operating
Cash Flow (as defined) to Total Cash Interest Expense of not less than
1.50 to 1.00 initially; and (D) a Minimum Fixed Charge Coverage Ratio
(the ratio of Annualized Operating Cash Flow (as defined) to the
Companys Fixed Charges (as defined) of not less than 1.00 to 1.00. As
of September 30, 2003, the Company was in compliance with the covenants
required by the Refinanced Credit Facility.

As of the date of this filling, the Amended and Restated Senior Credit
Facility had an outstanding balance of $16,000,000 bearing interest at a
LIBOR based interest rate of 4.93%. This interest rate expires
in February of 2004, at which time a new rate will be established.

(4)  System Sales

On March 11, 2003, the Company sold the operating assets and
franchise rights of its cable system in and around the community of Port
Angeles, Washington (the Port Angeles System). The Port Angeles System
was sold at a price of approximately $11,375,000 of which the Company
received approximately $10,800,000 at closing. The sales price was
adjusted at closing for the proration of certain revenues and expenses
and approximately $575,000 is being held in escrow and will be released
to the Company one year from the closing of the transaction, subject to
general representations and warranties. Historically, the Company has
entered into similarly structured transactions, and collected the amount
held in escrow. Substantially all of the proceeds were used to pay down
amounts outstanding under the Companys Senior Credit Facility.

On March 31, 2003, the Company sold the operating assets and franchise
rights of its cable system in and around the community of Aiken, South
Carolina (the Aiken System). The Aiken System was sold at a price of
approximately $46.3 million of which the Company received approximately
$42.6 million at closing. The sales price was adjusted at closing for the
proration of certain revenues and expenses and approximately $3.7 million
is being held in escrow and will be released to the Company one year from
the closing of the transaction, subject to general representations and
warranties. Historically, the Company has entered into similarly
structured transactions, and collected the amount held in escrow.
Substantially all of the proceeds were used to pay down amounts
outstanding under the Companys Senior Credit Facility.

The sales were made pursuant to offers by separate, independent third
parties. Based on the offers made, management determined that acceptance
of the offers would be in the best economic interest of the Company. The
sales were not a result of declining or deteriorating operations nor was
it necessary to create liquidity or reduce outstanding debt. It is the
opinion of management that the Company could have continued existing
operations and met all obligations as they became due.

The assets and liabilities attributable to the Aiken System and the Port
Angeles System as of December 31, 2002 have been reported as assets and
liabilities from discontinued operations in the accompanying balance
sheet, and consist of the following:





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##### Table of Contents



|                                                                       |                   |   |                   |            | 
|---------------------------------------------------------------------- | ----------------- | - | ----------------- | ---------- | 
|                                                                       |                   |   | As of            
|                                                                       |                   |   | December 31, 2002
|                                                                       |                   |   |                  
|Cash and cash equivalents                                              |                   | $ | 128,095           |           
|Accounts receivable                                                    |                   |   | 636,648           |           
|Prepaid expenses                                                       |                   |   | 65,139            |           
|Property and equipment, net of accumulated
depreciation of $10,905,201 |                   |   | 10,768,828        |           
|Franchise agreements (net of accumulated
amortization of $9,356,640)   |                   |   | 13,906,143        |           
|                                                                       |                   |   |                   |           
|                                                                       | Total assets      |   | $                 | 25,504,853 | 
|                                                                       |                   |   |                   |           
|Accounts payable                                                       |                   |   | 122,112           |           
|Accrued expenses                                                       |                   |   | 820,168           |           
|Converter deposits                                                     |                   |   | 9,152             |           
|Subscriber prepayments                                                 |                   |   | 492,178           |           
|                                                                       |                   |   |                   |           
|                                                                       | Total liabilities |   | $                 | 1,443,610  | 
|                                                                       |                   |   |                   |           

In addition, the revenue, expenses and other items attributable to the
operations of the Aiken System and the Port Angeles system during the
periods presented in this filing have been reported as discontinued
operations in the accompanying statements of operations and comprehensive
income, and include the following:





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##### Table of Contents



|                                                                                          |                                                                                                                     |   |                                         |            |      |   |           |            |  
|----------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------- | - | --------------------------------------- | ---------- | ---- | - | --------- | ---------- | -
|                                                                                          |                                                                                                                     |   | For the nine months ended September 30,
|                                                                                          |                                                                                                                     |   | 2003                                    |            | 2002
|                                                                                          |                                                                                                                     |   |                                         |            |     
|Service Revenues                                                                          |                                                                                                                     | $ | 3,079,389                               |            |      | $ | 9,337,109 |           
|Expenses:                                                                                 |                                                                                                                     |   |                                         |            |      |   |           |           
|                                                                                          | Cable system operations (including
$6,289 and $60,976, net paid to
affiliates in 2003 and 2002, respectively)       |   |                                         | 1,205,573  |      |   |           | 3,472,334  |  
|                                                                                          | General and administrative (including
$152,093 and $159,808, net paid to
affiliates in 2003 and 2002, respectively) |   |                                         | 573,781    |      |   |           | 1,398,602  |  
|                                                                                          | Management fees paid to Parent                                                                                      |   |                                         | 153,637    |      |   |           | 466,856    |  
|                                                                                          | Depreciation and amortization                                                                                       |   |                                         | 417,798    |      |   |           | 1,415,516  |  
|                                                                                          |                                                                                                                     |   |                                         |            |      |   |           |           
|                                                                                          |                                                                                                                     |   | 2,350,789                               |            |      |   | 6,753,308 |           
|                                                                                          |                                                                                                                     |   |                                         |            |      |   |           |           
|Income from operations                                                                    |                                                                                                                     |   | 728,600                                 |            |      |   | 2,583,801 |           
|Other income (expense):                                                                   |                                                                                                                     |   |                                         |            |      |   |           |           
|                                                                                          | Interest expense                                                                                                    |   |                                         | (711,822   | )    |   |           | (3,197,020 | )
|                                                                                          | Gain on sale of systems                                                                                             |   |                                         | 31,525,585 |      |   |           |           |  
|                                                                                          |                                                                                                                     |   |                                         |            |      |   |           |           
|Income (loss) from operation of Aiken and Port
Angeles Systems, before income tax expense |                                                                                                                     |   | 31,542,363                              |            |      |   | (613,219  | )         
|Income tax expense                                                                        |                                                                                                                     |   | (500,000                                | )          |      |   |          |           
|                                                                                          |                                                                                                                     |   |                                         |            |      |   |           |           
|Income (loss) from operations of Aiken and Port
Angeles Systems, net                      |                                                                                                                     | $ | 31,042,363                              |            |      | $ | (613,219  | )         
|                                                                                          |                                                                                                                     |   |                                         |            |      |   |           |           

|                                                            |                                                                         |   |                          |           |  
|----------------------------------------------------------- | ----------------------------------------------------------------------- | - | ------------------------ | --------- | -
|                                                            |                                                                         |   | For the three months    
|                                                            |                                                                         |   | ended
September 30, 2002
|                                                            |                                                                         |   |                         
|Service Revenues                                            |                                                                         | $ | 3,117,722                |          
|Expenses:                                                   |                                                                         |   |                          |          
|                                                            | Cable system operations (including
$20,045, net paid to affiliates)     |   |                          | 1,176,199 |  
|                                                            | General and administrative (including
$146,876, net paid to affiliates) |   |                          | 447,172   |  
|                                                            | Management fees paid to Parent                                          |   |                          | 155,886   |  
|                                                            | Depreciation and amortization                                           |   |                          | 476,695   |  
|                                                            |                                                                         |   |                          |          
|                                                            |                                                                         |   | 2,255,952                |          
|                                                            |                                                                         |   |                          |          
|Income from operations                                      |                                                                         |   | 861,770                  |          
|Other income (expense):                                     |                                                                         |   |                          |          
|                                                            | Interest expense                                                        |   |                          | (907,730  | )
|                                                            |                                                                         |   |                          |          
|Loss from operations of Aiken and Port
Angeles Systems, net |                                                                         | $ | (45,960                  | )        
|                                                            |                                                                         |   |                          |          





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##### Table of Contents



In accordance with EITF 87-24, Allocation of Interest to Discontinued
Operations, the Company allocated interest expense to discontinued
operations using the historic weighted average interest rate applicable
to the Revised Senior Credit Facility and approximately $51.8 million in
principal payments, which were applied to the Revised Senior Credit
Facility as a result of the sale of the Aiken System and the Port Angeles
System.





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##### Table of Contents






PART I (continued)

ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

Results of Continuing Operations - Nine Months Ended September 30,
2003 and 2002

Revenues totaled $37.2 million for the nine months ended September 30,
2003, an increase of approximately $600,000 or 1.6% over the same period
in 2002. Of these revenues, $25.5 million (68%) was derived from basic
services, $2.5 million (7%) from premium services, $4.8 million (13%)
from expanded basic services, $700,000 (2%) from digital services, $1.9
million (5%) from advertising and $1.8 million (5%) from other sources.

Average monthly revenue per subscriber increased $1.95 or 4.3% from
$45.51 for the nine months ended September 30, 2002 to $47.46 for the
nine months ended September 30, 2003. This increase is primarily
attributable to rate increases implemented during the first quarter of
2003 and increases in advertising revenue.

Cable system operation expenses increased approximately $300,000 or 2.1%
from $14.0 million to $14.3 million for the nine months ended September
30, 2003. Programming costs, which represent the primary component of
cable system operation expenses, increased approximately $300,000 or 2.7%
as a result of rate increases by certain programming vendors and
additional costs that were incurred as a result of offering additional
channels in some of the Companys systems.

General and administrative expenses increased approximately $1.6 million
or 30.2% from $5.3 million to $6.9 million for the nine months ended
September 30, 2003. This increase is primarily attributable to increases
in corporate overhead allocations by the Companys Parent. These
corporate overhead allocations had been reduced in prior periods, to the
extent that allocation of these costs would have resulted in
non-compliance with the Companys debt covenants. Corporate overhead
expenses represent actual costs incurred by the Companys parent for the
period that are attributable to the operations of the Company. The
Company has no obligation or liability to its Parent for past reductions
in corporate overhead charges.

Management fees for the nine months ended September 30, 2003 increased
approximately 1.6% over the same period in the previous year. Management
fees are calculated at 5.0% of gross revenues.

Depreciation and amortization expenses for the nine months ended
September 30, 2003 remained relatively constant with the same period in
2002.

Interest expense allocated to continuing operations increased
approximately $1.3 million, or 18.3% from $7.1 million to $8.4 million
for the nine months ended September 30, 2003. This increase is primarily
attributable to a $1.9 million reduction in the amount of gains
recognized on the Companys interest rate swap agreements, offset by a
$600,000 reduction in interest expense on the Companys Revised Senior
Credit Facility due to lower average outstanding indebtedness as a result
of required principal repayments and lower interest rates during 2003 as
compared to 2002.

In accordance with EITF 87-24, Allocation of Interest to Discontinued
Operations, the Company allocated interest expense to discontinued
operations using the historic weighted average interest rate applicable
to the Revised Senior Credit Facility and approximately $51.8 million
in principal payments, which were applied to the Revised Senior Credit
Facility as a result of the sale of the Aiken System and the Port
Angeles System.





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##### Table of Contents



The Company has elected not to designate its interest rate swap
agreements as hedges under SFAS No. 133. Interest rate swap agreements
in place as of December 31, 2002 expired during the first quarter of
2003, and the Company has elected not to enter into any new agreements.
Accordingly, the Company recorded a debit to eliminate the liability
on its balance sheet, and a corresponding credit in its statement of
operations of approximately $120,000.

Results of Continuing Operations - Three Months Ended September 30,
2003 and 2002

Revenues totaled $12.4 million for the three months ended September 30,
2003, an increase of approximately $200,000 or 1.6% over the same period
in 2002. Of these revenues, $8.4 million (67%) was derived from basic
services, $800,000 (6%) from premium services, $1.6 million (13%) from
expanded basic services, $200,000 (2%) from digital services, $700,000
(6%) from advertising and $700,000 (6%) from other sources.

Average monthly revenue per subscriber increased $1.80 or 3.9% from
$46.01 for the three months ended September 30, 2002 to $47.81 for the
three months ended September 30, 2003. This increase is primarily
attributable to rate increases implemented during the first quarter of
2003 and increased advertising revenue.

Cable system operation expenses for the three months ended September 30,
2003 remained relatively constant with the same period in 2002.

General and administrative expenses increased approximately $800,000 or
47.1% from $1.7 million to $2.5 million for the three months ended
September 30, 2003. This increase is primarily attributable to increases
in corporate overhead allocations by the Companys Parent. These
corporate overhead allocations had been reduced in prior periods, to the
extent that allocation of these costs would have resulted in
non-compliance with the Companys debt covenants. Corporate overhead
expenses represent actual costs incurred by the Companys parent for the
period that are attributable to the operations of the Company. The
Company has no obligation or liability to its Parent for past reductions
in corporate overhead charges.

Management fees for the three months ended September 30, 2003 increased
approximately 1.6% over the same period in the previous year. Management
fees are calculated at 5.0% of gross revenues.

Depreciation and amortization expenses for the three months ended
September 30, 2003 remained relatively constant with the same period in
2002.

Interest expense allocated to continuing operations increased
approximately $500,000, or 20.8% from $2.4 million to $2.9 million for
the three months ended September 30, 2003. This increase is primarily
attributable to a $600,000 gain recognized on the Companys interest rate
swap agreements in 2002, offset by a $100,000 reduction in interest
expense on the Companys Revised Senior Credit Facility due to lower
average outstanding indebtedness as a result of required principal
repayments and lower interest rates during 2003 as compared to 2002.

In accordance with EITF 87-24, Allocation of Interest to Discontinued
Operations, the Company allocated interest expense to discontinued
operations using the historic weighted average interest rate applicable
to the Revised Senior Credit Facility and approximately $51.8 million
in principal payments, which were applied to the Revised Senior Credit
Facility as a result of the sale of the Aiken System and the Port
Angeles System.

The Company has elected not to designate its interest rate swap
agreements as hedges under SFAS No. 133. Interest rate swap agreements
in place as of December 31, 2002 expired during the first quarter of
2003, and the Company has elected not to enter into any new agreements.





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##### Table of Contents



Liquidity and Capital Resources

The cable television business generally requires substantial capital

for the construction, expansion and maintenance of the signal
distribution system. In addition, the Company has pursued a business
strategy, which includes selective acquisitions. The Company has
financed these expenditures through a combination of cash flow from
operations, borrowings under the revolving credit and term loan
facility provided by a variety of banks and the issuance of senior
subordinated notes. The Company does not have any required principal
payments for the remainder of 2003. The Company anticipates that cash
flow from operations will be sufficient to service its debt over the
next twelve month period.

Net cash provided by operating activities was $6.6 million for the nine
months ended September 30, 2003. Adjustments to the $29.9 million net
income for the period to reconcile to net cash provided by operating
activities consisted primarily of a gain of $31.5 million related
primarily to the sales of the Aiken System and the Port Angeles System,
offset by $7.0 million of depreciation and amortization and increases
in operating liabilities of approximately $500,000.

Net cash provided by investing activities was $48.7 million for the
nine months ended September 30, 2003, and consisted primarily of $53.4
million of net proceeds from the sales of the Aiken System and the Port
Angeles System, offset by $4.7 million in capital expenditures.

Net cash used in financing activities consisted of $52.7 million in
principal prepayments on the Revised Senior Credit Facility, as a
result of the sale of the Aiken System and the Port Angeles System.

EBITDA decreased approximately $1.4 million or 9.0%, from $15.6 million
to $14.2 million for the nine months ended September 30, 2003, and EBITDA
margin decreased from 42.5% to 38.0%. The aforementioned increases in
revenues were offset by increased administrative overhead charges and
operating expenses as a result of rate increases by certain programming
vendors and the launch of new programming services, discussed above.

Free cash flow increased $200,000, or 18.2%, from $1.1 million to $1.3
million for the nine months ended September 30, 2003. This increase is
attributable to the aforementioned decline in EBITDA, offset by declining
interest expense and capital expenditures.

EBITDA represents income from operations excluding the effect of
depreciation and amortization expense. EBITDA margin represents EBITDA
as a percentage of revenue. Free cash flow represents income from
operations, excluding the effects of depreciation and amortization, less
interest expense and capital expenditures. EBITDA and free cash flow are
commonly used to analyze companies on the basis of leverage and
liquidity. However, they are not measures determined under generally
accepted accounting principles, or GAAP, in the United States and may not
be comparable to similarly titled measures reported by other companies.
EBITDA and free cash flow should not be construed as a substitute for
operating income or as better measure of liquidity than cash flow from
operating activities, which are determined in accordance with GAAP. We
have presented EBITDA and free cash flow to provide additional
information with respect to our ability to meet future debt service,
capital expenditure and working capital requirements. A reconciliation
of net cash provided by operating activities to EBITDA and free cash flow
follows:





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##### Table of Contents



|                                                          |  |                           |            |      |  |  |            |  
|--------------------------------------------------------- |  | ------------------------- | ---------- | ---- |  |  | ---------- | -
|                                                          |  | For the nine months ended
|                                                          |  | September 30,            
|                                                          |  | 2003                      |            | 2002
|                                                          |  |                           |            |     
|Net cash provided by operating activities                 |  |                           | 6,611,676  |      |  |  | 8,016,342  |  
|Interest expense, excluding amortization
of loan fees     |  |                           | 8,184,756  |      |  |  | 8,783,251  |  
|Changes in certain assets and liabilities,
and other, net |  |                           | (640,929   | )    |  |  | (1,199,364 | )
|                                                          |  |                           |            |      |  |  |            |  
|EBITDA                                                    |  |                           | 14,155,503 |      |  |  | 15,600,229 |  
|                                                          |  |                           |            |      |  |  |            |  
|Interest expense, excluding amortization
of loan fees     |  |                           | (8,184,756 | )    |  |  | (8,783,251 | )
|Capital expenditures                                      |  |                           | (4,691,180 | )    |  |  | (5,753,630 | )
|                                                          |  |                           |            |      |  |  |            |  
|Free cash flow                                            |  |                           | 1,279,567  |      |  |  | 1,063,348  |  
|                                                          |  |                           |            |      |  |  |            |  

Amended and Restated Senior Credit Facility

On November 13, 2003, the Company amended and restated its existing
senior credit facility (the Amended and Restated Senior Credit
Facility). The Amended and Restated Senior Credit Facility establishes a
term loan in the amount of $15,000,000 and a $2,000,000 revolving credit
loan, under which the Company borrowed $1,000,000 upon amendment and
restatement. The proceeds from The Amended and Restated Senior Credit
Facility were used to repay the Companys existing senior credit
facility, with a balance of $15,351,534 at September 30, 2003, to provide
working capital and for other general purposes. The Amended and Restated
Senior Credit Facility matures on December 31, 2006 and requires the
Company to make quarterly principal payments beginning March 31, 2004.
The current portion of notes payable included in the accompanying balance
sheet as of September 30, 2003 reflects the principal payment
requirements of the Amended and Restated Senior Credit Facility. Annual
maturities of the Amended and Restated Senior Credit Facility are as
follows:

|      |      |   |            |           | 
|----- | ---- | - | ---------- | --------- | 
|      |      |   | Principal 
|      |      |   | Payments  
|      |      |   |           
|      | 2004 |   | $          | 2,800,000 | 
|      | 2005 |   |            | 3,400,000 | 
|      | 2006 |   |            | 9,800,000 | 
|      |      |   |            |          
|Total |      | $ | 16,000,000 |          
|      |      |   |            |          

The interest rate per annum applicable to the Amended and Restated Senior
Credit Facility is a fluctuating rate of interest measured by reference
to either: (i) the Index Rate, as defined, plus a borrowing margin of
2.50%; or (ii) the London interbank offered rate (LIBOR), plus a
borrowing margin of 3.75%.

The Amended and Restated Senior Credit Facility contains a number of
covenants, which among other things, require the Company to comply with
specified financial ratios, including maintenance, as tested on a
quarterly basis, of: (A) a Maximum Total Leverage Ratio (the ratio of
Total Debt to Annualized Operating Cash Flow (as defined)) of not more
than 6.50 to 1.00; (B) a Maximum Senior Leverage Ratio (the ratio of
Senior Debt to Annualized Operating Cash Flow (as defined)) of not more
than 1.00 to 1.00 (C) an Interest Coverage Ratio (the ratio of Operating
Cash Flow (as defined) to Total Cash Interest Expense of not less than
1.50 to 1.00 initially; and (D) a Minimum Fixed Charge Coverage Ratio
(the ratio of Annualized Operating Cash Flow (as defined) to the
Companys Fixed Charges (as defined) of not less than 1.00 to





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##### Table of Contents



1.00. As of September 30, 2003, the Company was in
compliance with the covenants required by the Refinanced Credit Facility.

As of the date of this filling, the Amended and Restated Senior Credit
Facility had an outstanding balance of $16,000,000 bearing interest at a
LIBOR based interest rate of 4.93%. This interest rate expires
in February of 2004, at which time a new rate will be established.

System Sale

On March 11, 2003, the Company sold the operating assets and franchise
rights of its cable system in and around the community of Port Angeles,
Washington (the Port Angeles System). The Port Angeles System was sold
at a price of approximately $11,375,000 of which the Company received
approximately $10,800,000 at closing. The sales price was adjusted at
closing for the proration of certain revenues and expenses and
approximately $575,000 is being held in escrow and will be released to
the Company one year from the closing of the transaction, subject to
general representations and warranties. Historically, the Company has
entered into similarly structured transactions, and collected on the
amount held in escrow. Substantially all of the proceeds were used to
pay down amounts outstanding under the Companys Senior Credit Facility.

On March 31, 2003, the Company sold the operating assets and franchise
rights of its cable system in and around the community of Aiken, South
Carolina (the Aiken System). The Aiken System was sold at a price of
approximately $46.3 million of which the Company received approximately
$42.6 million at closing. The sales price was adjusted at closing for the
proration of certain revenues and expenses and approximately $3.7 million
is being held in escrow and will be released to the Company one year from
the closing of the transaction, subject to general representations and
warranties. Historically, the Company has entered into similarly
structured transactions, and collected on the amount held in escrow.
Substantially all of the proceeds were used to pay down amounts
outstanding under the Companys Senior Credit Facility.

The sales were made pursuant to offers by separate, independent third
parties. Based on the offers made, management determined that acceptance
of the offers would be in the best economic interest of the Company. The
sales were not a result of declining or deteriorating operations nor was
it necessary to create liquidity or reduce outstanding debt. It is the
opinion of management that the Company could have continued existing
operations and met all obligations as they became due.

Obligations and Commitments

In addition to working capital needs for ongoing operations, the Company
has capital requirements for (i) annual maturities and interest payments
related to the term loan and (ii) required minimum operating lease
payments. The following table summarizes the Companys contractual
obligations, after effecting for the additional borrowings of $648,466
and the revised payment terms of the Amended and Restated Senior Credit
Facility and the sales of the Aiken System and the Port Angeles System
for the remainder of 2003 and in future years:

|                                                                                     |  |                        |           |      |  |      |            |      |  |      |            |            |  |       |            |  |  |   |             |  |  |   |        |  |  |   |             | 
|------------------------------------------------------------------------------------ |  | ---------------------- | --------- | ---- |  | ---- | ---------- | ---- |  | ---- | ---------- | ---------- |  | ----- | ---------- |  |  | - | ----------- |  |  | - | ------ |  |  | - | ----------- | 
|                                                                                     |  | Expected Maturity Date
|                                                                                     |  |                       
|                                                                                     |  | 2003                   |           | 2004 |  | 2005 |            | 2006 |  | 2007 |            | Thereafter |  | Total
|                                                                                     |  |                        |           |      |  |      |            |      |  |      |            |            |  |      
|Debt maturity                                                                        |  | $                      |          |      |  | $    | 2,800,000  |      |  | $    | 3,400,000  |            |  | $     | 9,800,000  |  |  | $ | 100,000,000 |  |  | $ |       |  |  | $ | 116,000,000 | 
|Interest payments (weighted average
interest rate of 9.52% as of
September 30, 2003) |  |                        | 5,326,582 |      |  |      | 10,969,780 |      |  |      | 10,816,950 |            |  |       | 10,491,570 |  |  |   | 10,250,000  |  |  |   |       |  |  |   | 47,854,882  | 
|Minimum operating lease payments                                                     |  |                        | 20,833    |      |  |      | 74,296     |      |  |      | 55,331     |            |  |       | 44,663     |  |  |   | 37,006      |  |  |   | 53,831 |  |  |   | 285,960     | 
|                                                                                     |  |                        |           |      |  |      |            |      |  |      |            |            |  |       |            |  |  |   |             |  |  |   |        |  |  |   |             | 
|Total contractual cash obligations (a)                                               |  | $                      | 5,347,415 |      |  | $    | 13,844,076 |      |  | $    | 14,272,281 |            |  | $     | 20,336,233 |  |  | $ | 110,287,006 |  |  | $ | 53,831 |  |  | $ | 164,140,842 | 



|(a) |  | These contractual obligations do not include accounts payable and
accrued liabilities, which are expected to be paid in 2003.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------





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##### Table of Contents



Capital Expenditures

For the nine months ended September 30, 2003, the Company incurred
capital expenditures of approximately $4.7 million. Capital expenditures
included: (i) the launch of high-speed data services, (ii) continued
deployment of new product digital services; (iii) expansion and
improvement of cable properties; (iv) additions to plant and equipment,
and; (v) line drops, extensions and installations of cable plant
facilities.

The Company plans to invest approximately $2.5 million in capital
expenditures for the remainder of 2003. This represents anticipated
expenditures for upgrading and rebuilding certain distribution
facilities, which will allow for the continued deployment of new
products, such as digital and high-speed data services in selected
markets. Furthermore, capital expenditures will involve extensions of
distribution facilities to add new subscribers and vehicle replacements.

Recently Issued Accounting Standards

Statement of Financial Accounting Standards No. 143 Effective January
1, 2003, the Company adopted SFAS No. 143, Accounting for Asset
Retirement Obligations, (SFAS No. 143) which addresses financial
accounting and reporting for obligations associated with the retirement
of tangible long lived assets and associated asset retirement obligations
(ARO). Under the scope of this pronouncement, the Company has ARO
associated with the removal of equipment from poles and headend sites
that are leased from third parties. Based on managements analyses, the
Company has concluded that for the reasons mentioned below, it is not
able to reasonably estimate the fair values of the ARO. First, to
operate the cable television network, the Company will always need to
have equipment deployed at these poles and headend sites. Additionally,
the Company has not historically incurred any ARO and, given the length
of time in the future when any potential obligations might exist,
management believes that estimating any probability at this time is not
practicable. As a result, upon adoption of SFAS No. 143, the Company did
not record any ARO associated with the obligation to remove the
equipment.

Statement of Financial Accounting Standards No. 149 In April of 2003,
the FASB issued SFAS No. 149, Amendment of Statement 133 on Derivative
Instruments and Hedging Activities. SFAS No. 149 amends and clarifies
financial accounting and reporting for derivative instruments, including
certain derivative instruments embedded in other contracts, and other
hedging activities under SFAS No. 133. The adoption of SFAS No. 149 did
not have a material impact on the Companys financial statements.

Statement of Financial Accounting Standards No. 150- In May 2003, the
FASB issued Statement No. 150, Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity, which
addresses financial accounting and reporting for certain financial
instruments with characteristics of both liabilities and equity and
requires that those instruments be classified as liabilities in
statements of financial position. Previously many of those financial
instruments were classified as equity. The Statement is effective for
financial instruments entered into or modified after May 31, 2003 and
otherwise is effective at the beginning of the first interim period
beginning after June 15, 2003. The adoption of the Statement did not
have a material impact on the Companys operating results or financial
position.

Critical Accounting Policies

This discussion and analysis of our financial condition and results
of operations is based on the Companys financial statements, which
have been prepared in accordance with accounting principles
generally accepted in the United States of America. The preparation
of these financial statements requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amount of
revenues and expenses during the reporting period. Actual results
could differ from those estimates. The following critical
accounting policies, which have been chosen among alternatives,
require a more significant amount of management judgment than other
accounting policies the Company employs.





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##### Table of Contents



Revenue Recognition- Cable television service revenue, including service
and maintenance, is recognized in the month service is provided to
customers. Advance payments on cable services to be rendered are
recorded as subscriber prepayments. Revenues resulting from the sale of local spot
advertising are recognized when the related advertisements or commercials
appear before the public.

Property and Equipment- Property and equipment are recorded at cost.
Costs of additions and substantial improvements, which include materials,
labor, and other indirect costs associated with the construction of cable
transmission and distribution facilities, are capitalized. Indirect
costs include employee salaries and benefits, travel and other costs.
These costs are estimated based on historical information and analysis.
The Company periodically performs evaluations of these estimates as
warranted by events or changes in circumstances.

In accordance with SFAS No. 51, Financial Reporting by Cable
Television Companies, the Company also capitalizes costs associated
with initial customer installations. The costs of disconnecting
service or reconnecting service to previously installed locations is
expensed in the period incurred. Costs for repairs and maintenance
are also charged to operating expense, while equipment replacements,
including the replacement of drops, are capitalized.

Intangible Assets- In accordance with the provisions of SFAS No. 142,
Goodwill and Other Intangible Assets, the Company does not amortize
goodwill or any other intangible assets determined to have indefinite
lives. The Company has determined that its franchises meet the
definition of indefinite lived assets. The Company tests these assets
for impairment on an annual basis during the fourth quarter, or on an
interim basis if an event occurs or circumstances change that would
reduce the fair value of a reporting unit below its carrying value.

Management believes the franchises have indefinite lives because the
franchises are expected to be used by the Company for the
foreseeable future and effects of obsolescence, competition and
other factors are minimal. In addition, the level of maintenance
expenditures required to obtain the future cash flows expected from
the franchises are not material in relation to the carrying value of
the franchises. While the franchises have defined lives based on
the franchising authority, renewals are routinely granted, and
management expects them to continue to be granted. This expectation
is supported by managements experience with the Companys
franchising authorities and the franchising authorities of the
Companys affiliates.





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##### Table of Contents






ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is subject to market risks arising from changes in interest
rates. The Companys primary interest rate exposure results from changes
in LIBOR or the prime rate, which are used to determine the interest rate
applicable to the Companys debt facilities. The Company has from time
to time entered into interest rate swap agreements to partially hedge
interest rate exposure. Interest rate swaps have the effect of
converting the applicable variable rate obligations to fixed or other
variable rate obligations. As of the date of this filing, the Company is
not involved in any interest rate swap agreements. The potential loss
over one year that would result from a hypothetical, instantaneous and
unfavorable change of 100 basis points in the interest rate of all of the
Companys variable rate obligations would be approximately $154,000.

The Company does not use financial instruments for trading or other
speculative purposes.

Cautionary statement for purposes of the Safe Harbor provisions of
the Private Litigation Reform Act of 1995. Statements contained or
incorporated by reference in this document that are not based on
historical fact are forward-looking statements within the meaning of
the Private Securities Reform Act of 1995. Forward-looking statements
may be identified by use of forward-looking terminology such as
believe, intends, may, will, expect, estimate,
anticipate, continue, or similar terms, variations of those terms
or the negative of those terms.




ITEM 4. CONTROLS AND PROCEDURES

Based on their evaluation as of the end of the period covered by this
report, the Companys Chief Executive Officer and President (Principal
Financial and Accounting Officer) have concluded that the Companys
disclosure controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934 (the Exchange
Act)) are effective to ensure that information required to be
disclosed by the Company in reports that it files or submits under the
Exchange Act is recorded, processed, summarized and reported within the
time periods specified in Securities and Exchange Commission rules and
forms.

There were no significant changes in the Companys internal controls or
in other factors that could significantly affect these controls
subsequent to the date of their evaluation, including any corrective
actions with regard to significant deficiencies and material
weaknesses.





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##### Table of Contents






PART II - OTHER INFORMATION




ITEM 1 Legal proceedings

The Company is a party to ordinary and routine litigation proceedings
that are incidental to the Companys business. Management believes
that the outcome of all pending legal proceedings will not,
individually or in the aggregate, have a material adverse effect on the
Company, its financial condition, prospects and debt service ability.




ITEM 2 Changes in securities

None




ITEM 3 Defaults upon senior securities

None




ITEM 4 Submission of matters to a vote of security holders

None




ITEM 5 Other information

None




ITEM 6 Exhibits and Reports on Form 8-K

(a)  Exhibit Index

|       |  |                                                                                                                                                  
|------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------
|31(a). |  | Certification of Chief Executive Officer
dated November 14, 2003 pursuant to section 302 of the
Sarbanes-Oxley Act                               
|       |  |                                                                                                                                                  
|31(b). |  | Certification of President (Principal
Financial and Accounting Officer) dated November 14, 2003
pursuant to section 302 of the Sarbanes-Oxley Act
|       |  |                                                                                                                                                  
|32(a). |  | Certification of Chief Executive Officer
dated November 14, 2003 pursuant to section 906 of the
Sarbanes-Oxley Act                               
|       |  |                                                                                                                                                  
|32(b). |  | Certification of President (Principal
Financial and Accounting Officer) dated November 14, 2003
pursuant to section 906 of the Sarbanes-Oxley Act

(b)  Reports on Form 8-K

None





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##### Table of Contents






SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

NORTHLAND CABLE TELEVISION, INC. AND SUBSIDIARY

|                                                                              |  |                                                             |  |         
|----------------------------------------------------------------------------- |  | ----------------------------------------------------------- |  | --------
|SIGNATURES                                                                    |  | CAPACITIES                                                  |  | DATE    
|                                                                              |  |                                                             |  |         
|/s/
            
RICHARD I.
CLARK

           
       Richard I. Clark        |  | Executive Vice President, Treasurer and
Assistant Secretary |  | 11-14-03
|                                                                              |  |                                                             |  |         
|/s/            
       GARY S. JONES

           
              Gary S. Jones |  | President                                                   |  | 11-14-03